Federal Register / Vol. 72, No. 76 / Friday, April 20, 2007 / Notices 19997 

22 15 U.S.C. 78s(b)(2). 

23See Securities Exchange Act Release No. 55547 

(March 28, 2007), 72 FR 16388 (April 4, 2007) (SR–

Amex–2006–110). 

24 15 U.S.C. 78s(b)(5). 

25 15 U.S.C. 78s(b)(2). 

26 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(i). 

4 17 CFR 240.19b–4(f)(1). 

5See Rule 8.3A.01. 

6 ‘‘Any actions taken by the President of the 

Exchange pursuant to this paragraph will be 

submitted to the SEC in a rule filing pursuant to 

Section 19(b)(3)(A) of the Exchange Act.’’ Rule 

8.3A.01(c). 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,22 for approving the proposed rule 

change, as modified by Amendment No. 

1, prior to the thirtieth day after the date 

of publication of notice in the Federal 

Register. The Commission notes that the 

proposal is consistent with the 

Exchange’s listing and trading standards 

in CBOE Rules 5.3 and 5.4, and the 

Commission has recently approved a 

similar proposal, after publishing it for 

a full comment period and receiving no 

comments.23 Therefore, the Commission 

does not believe that the proposed rule 

change, as amended, raises novel 

regulatory issues. Consequently, the 

Commission believes that it is 

appropriate to permit investors to 

benefit from the flexibility afforded by 

trading these products without delay. 

Accordingly, the Commission finds 

that there is good cause, consistent with 

Section 6(b)(5) of the Act,24 to approve 

the proposal, as amended, on an 

accelerated basis. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,25 that the 

proposed rule change (SR–CBOE–2007–

21), as modified by Amendment No. 1, 

be, and is hereby approved on an 

accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.26

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–7494 Filed 4–19–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55637; File No. SR–CBOE–

2007–35] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Increase the Class 

Quoting Limit in Several Option 

Classes 

April 16, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 10, 

2007, the Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

substantially prepared by the CBOE. 

The Exchange has designated this 

proposal as one constituting a stated 

policy, practice, or interpretation with 

respect to the meaning, administration, 

or enforcement of an existing rule under 

Section 19(b)(3)(A)(i) of the Act,3 and 

Rule 19b–4(f)(1) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

CBOE proposes to increase the class 

quoting limit in several option classes. 

The text of the proposed rule change is 

available on CBOE’s Web site (http:// 

www.cboe.com), at the CBOE’s Office of 

the Secretary, and at the Commission’s 

public reference room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

CBOE included statements concerning 

the purpose of, and basis for, the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. The CBOE has 

prepared summaries, set forth in 

Sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

CBOE Rule 8.3A, Maximum Number 

of Market Participants Quoting 

Electronically per Product, establishes 

class quoting limits (‘‘CQLs’’) for each 

class traded on the Hybrid Trading 

System.5 A CQL is the maximum 

number of quoters that may quote 

electronically in a given product and the 

current levels are established from 25–

40, depending on the trading activity of 

the particular product. 

Rule 8.3A, Interpretation .01(c) 

provides a procedure by which the 

President of the Exchange may increase 

the CQL for a particular product. In this 

regard, the President of the Exchange 

may increase the CQL in exceptional 

circumstances, which are defined in the 

rule as ‘‘substantial trading volume, 

whether actual or expected.’’ 6 The 

effect of an increase in the CQL is 

procompetitive in that it increases the 

number of market participants that may 

quote electronically in a product. The 

purpose of this filing is to increase the 

CQL in the following option classes as 

described below: 

Option class Current 

CQL 

New 

CQL 

American Home Mortgage Investment 

Corp. (AHM) .............. 25 30 

Dendreon Corporation 

(DNDN) ..................... 25 40 

Imergent Inc. (IIG) ........ 25 30 

Accredited Home Lenders Holding (LEND) ... 35 45 

Novastar Financial, Inc. 

(NFI) .......................... 30 40 

Neurochem, Inc. 

(NRMX) ..................... 25 35 

The trading volume in these option 

classes recently has increased 

substantially. Increasing the CQL in 

these classes will enable the Exchange 

to enhance the liquidity offered, thereby 

offering deeper and more liquid 

markets. 

2. Statutory Basis 

Accordingly, CBOE believes the 

proposed rule change is consistent with 

the Act and the rules and regulations 

under the Act applicable to a national 

securities exchange and, in particular, 

the requirements of section 6(b) of the 

Act.7 Specifically, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 8

requirements that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts and, in general, to protect investors 

and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 


sroberts on PROD1PC70 with NOTICES
19998 Federal Register / Vol. 72, No. 76 / Friday, April 20, 2007 / Notices 

9 15 U.S.C. 78s(b)(3)(A)(i). 

10 17 CFR 240.19b–4(f)(1). 

11 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2CFR 240.19b–4. 

3The proposal would also expand the rule to 

address conduct by persons associated with a 

participant firm, in addition to the firm’s partners, 

directors, officers and registered employees. 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither received nor 

solicited written comments on the 

proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

will take effect upon filing with the 

Commission pursuant to Section 

19(b)(3)(A)(i) of the Act 9 and Rule 19b–

4(f)(1) thereunder,10 because it 

constitutes a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CBOE–2007–35 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2007–35. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing also will be 

available for inspection and copying at 

the principal office of the CBOE. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–CBOE–2007–35 and should 

be submitted on or before May 11, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.11

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–7554 Filed 4–19–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55625; File No. SR–CHX–

2007–08] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing of Proposed Rule Change To 

Expand Its Price Manipulation Rule To 

Address Additional Instances of 

Improper Behavior 

April 12, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 21, 

2007, the Chicago Stock Exchange, Inc. 

(‘‘CHX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been 

substantially prepared by the CHX. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

rule relating to price manipulation to 

address two separate instances of 

improper activity: (1) Manipulative 

conduct consisting of a single event (in 

addition to a series of events, as the 

current rule contemplates) and (2) 

manipulation based upon the entry of 

orders as opposed to that based solely 

upon the entry of trades. The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, and http:// 

www.chx.com/rules/ 

proposed_rules.htm. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

CHX included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. The CHX has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Through this proposal, the Exchange 

seeks to amend its rule relating to price 

manipulation to address two separate 

instances of improper activity: (1) 

Manipulative conduct consisting of a 

single event (in addition to a series of 

events, as the current rule contemplates) 

and (2) manipulation based upon the 

entry of orders as opposed to that based 

solely upon the entry of trades.3

As an initial matter, the Exchange 

believes that these changes to the rule 

would appropriately establish that 

improper price manipulation could 

occur, in certain circumstances, when 

orders are entered at successively higher 

or lower prices, not just upon the 

execution of a series of trades at 

successively higher or lower prices. 

Order-based manipulation, sometimes 

called spoofing, may be intended to take 

advantage of algorithms or electronic 

traders who focus on changes to the bid 

or offer in trading. In such situations, 


sroberts on PROD1PC70 with NOTICES